Houston Strategies

Sunday, December 27, 2015

2015 Highlights

Time for the annual hike down memory lane for 2015, wrapping up the 11th year of this blog (official anniversary coming up in March). These posts have been chosen with a particular focus on significant ideas I'd like to see kept alive for discussion and action, and they're mainly targeted at new readers who want to get caught up with a quick overview of the Houston Strategies landscape. I also like to track what I think of as "reference posts" that sum up a particular topic or argument; and, last but not least, they've also been invaluable for me to track down some of my best thinking for meetings or when requested by others (as is the ever-helpful Google search).

Don't forget we offer an email option for the roughly once/week posts - see the Google Groups subscription signup box in the right sidebar. An RSS feed link is also available in the right sidebar.

And don't forget the highlights from the first few years. For what it's worth, I think the best ideas are found there, often in the first year (I had a lot "stored up" before I started blogging) and most definitely in the 10th birthday retrospective and the best of the first 1,000.

Sunday, December 20, 2015

The emerging cross-ideological consensus on excessive zoning and land-use regulations

There seems to be a growing awareness of the downsides of zoning and excessive land regulation in cities, as evidenced by these five recent items. Apologies for the long excerpts, but these articles are making important points I really want to convey the essence of.

"In recent years, and especially over the last few months, economists and other public policy experts across the political spectrum have come to realize that zoning rules are a major obstacle to affordable housing and economic opportunity for the poor and lower middle class. By artificially restricting new construction, zoning and other similar land-use restrictions greatly increase the price of housing, and prevents the market from adjusting to increasing demand.
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[E]xcessive or unnecessary land use or zoning regulations have consequences that go beyond the housing market to impede mobility and thus contribute to rising inequality and declining productivity growth…

[S]ome land use regulations can be beneficial… But in other cases, zoning regulations and other local barriers to housing development allow a small number of individuals to capture the economic benefits of living in a community, thus limiting diversity and mobility. The artificial upward pressure that zoning places on house prices — primarily by functioning as a supply constraint — also may undermine the market forces that would otherwise determine how much housing to build, where to build, and what type to build, leading to a mismatch between the types of housing that households want, what they can afford, and what is available to buy or rent….

Zoning and other land use regulations, by restricting the supply of housing and so increasing its cost,may make it difficult for individuals to move to areas with better-paying jobs and higher-quality schools.
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Among those who support reform, there is disagreement between advocates of a more technocratic approach to limiting zoning, and those like Edward Glaeser and myself who would prefer to follow the excellent example of Houston, and abolish zoning altogether. In my view, the latter solution is preferable in a world of widespread voter ignorance, where the public is unlikely to be able to monitor the extremely complex details of zoning closely to ensure that it will not serve narrow interest groups at the expense of the general public.

Despite its limitations, the growing cross-ideological agreement on zoning is a valuable development. Similar cross-ideological agreement among experts helped set the stage for airline deregulation in the late 1970s, creating enormous benefits for consumers. The potential benefits of zoning deregulation – greatly increased housing and job opportunities for millions of people – might be even greater.
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UPDATE #2: This post responds to me by arguing that Houston, despite its lack of zoning, has a variety of other dysfunctional land-use restrictions. That is true. But Houston still has much less in the way of regulatory obstacles to development than other large cities, which do have restrictive zoning. That is one of the reasons why many people are “voting with their feet” for Houston and other cities with similar policies. The point is not that Houston is perfect (it is far from it), but that following its example would be a huge improvement for many other cities."

Aaron Renn (The Urbanophile) wrote on a similar theme in the City Journal last Spring (hat tip to Scott): "Libertarians of Convenience - Urban progressives favor deregulation—but only for things they like or want to do."

"In Texas’s cities, by contrast, progressives often share, to some degree, the state’s pro-freedom, pro-market ethos. That’s why Houston, though hardly without restrictions on building, has no zoning per se and a pro-market Democrat, Annise Parker, for mayor. Unsurprisingly, it remains an affordable place to live, as do other low-regulation cities, such as Indianapolis."

"Zoning has shaped American cities since 1916, when New York City adopted the first comprehensive ordinance. It has remained a popular and widely used institution, particularly for homeowners wishing to protect the value of their homes. As values have soared in recent years, however, this protection has accelerated to the degree that new housing development has become unreasonably difficult and costly. The widespread Not in My Backyard (NIMBY) syndrome is driven by voters’ excessive concern about their home values and creates barriers to growth that reach beyond individual communities. Those barriers contribute to suburban sprawl, entrench income and racial segregation, retard regional immigration to the most productive cities, add to national wealth inequality, and slow the growth of the American economy. Zoning Rules, an update of Fischel’s 1985 classic book The Economics of Zoning, examines this history while offering solutions to the unintended consequences of zoning."

"After many decades of essentially ignoring the role of land, economists are starting to reconsider. Some are worried that landlords are hurting growth by making it too expensive to live in highly productive cities. Now, some are starting to think about how land figures in the rise in inequality.

The basic idea is that landlords use their local political power to stack the deck. Using their money and connections to sway local elections, they can influence politicians to enact land-use regulations that keep out other people and businesses. That gives them a so-called first mover advantage that shuts out the competition. At first, people who want to move to for work or to start a business can move to other, newer cities where local landlords are not as politically entrenched and regulation not yet as onerous. But eventually the country fills up with powerful landowners, and the options for cheap relocation become limited. Stuck in dying cities or far away from job opportunities, potential employees languish in poverty.
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According to Furman, some of the change may be due to more zoning. Since the late 1970s, land-use regulation has skyrocketed in the U.S. That has caused housing prices to go up at a much faster rate than construction costs -- something sure to please existing homeowners, but which locks potential homeowners out of the market. The more zoned a city is, the less affordable it tends to be.
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Lack of affordability doesn’t just create inequality among individuals, it creates inequality across regions. Furman shows that states with more constrained housing supply have seen much slower income convergence between different cities. That strongly implies that land-use restrictions are effectively keeping people penned up in bad locations.
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If it turns out that zoning really is a major drain on the U.S. economy, it opens the possibility of a bipartisan coalition. Conservatives are interested in limiting regulation overall, while liberals would like to reduce inequality. Since this is one of the clearest cases where regulation is increasing inequality, politicians on both sides of the ideological divide should figure out a way to come together to work out reforms."

Monday, December 14, 2015

Apologies for not posting last week - the whole world seems to want to pack a month's worth of meetings and work into the first 2.5 weeks of December. On to the big backlog of items:

I attended TXDoT's public information meeting on the proposed 610W elevated express lanes (details), and as supportive of the idea as I am, I'm concerned about the details of this plan. It would allow express elevated travel along four lanes from just north of I10 to just south of 59, but the problem is that they can only find space for single lane entrances and exits, which essentially cuts the throughput in half. Hopefully someone can come up with some potential alternatives - let's hope so or I have trouble seeing good cost-benefit here.

"As the paper shows, a freeway lane can typically move up to 2,000 vehicles per hour, but when traffic slows due to congestion, this can fall below 1,000 vehicles per hour. The net result is that road pricing can paradoxically double road capacities, thus giving everyone more options to get where they want to go, not less."

"From the perspective of a transit agency, an express toll lane provides it with an uncongested high-speed guideway at zero capital cost (other than the cost of the buses). And a seamless network of ETLs, as planned in most of these metro areas, provides transit with the infrastructure for region-wide express bus service—again, without the massive infrastructure cost that a rail system of comparable geographic extent would entail—if it could somehow find the umpteen billions of dollars to build such a rail network."

"Much of today's urban transportation planning focuses on transit and "smart growth." According to this set of ideas, suburbanization (aka "sprawl") is bad and should be discouraged, while higher density is good and should be increased, so that "we can get people out of their cars" and do other good things like enabling lots more people to walk or bike to work. But what if this set of policies turned out to be a recipe for urban decline?
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If their analysis is correct (and I think it is), much of current transportation and land use thinking is mistaken.
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The main implication of this research is that "the more integrated metropolitan labor markets are, the more productive they are." And therefore transportation policies should promote:
- Speedier rather than slower commuting;
- More rather than less commuting; and,
- Longer rather than shorter commutes.

These policies expand the "opportunity circles" of both employees and job-seekers. But they are the opposite of what those who are promoting "jobs-housing balance" try to achieve: to get people to work closer to where they live, accepting a convenient job rather than the best (most economically productive) job.
...In order not to undercut metro area economic productivity, transportation and land-use policies should enable people and companies to maximize the size of their opportunity circles, by facilitating faster, longer-distance commuting.

Everyone concerned with transportation and land-use policies should read these important papers."

Finally, a thought I had this week on the debate about terminating Texas high-speed rail at 290 and I10 vs. bringing it all the way into downtown: if you look at the most likely sources and destinations for HSR business riders, it's likely to be a zone from downtown out west through Uptown to Westchase and the Energy Corridor. The easiest and most central arrival and departure point is 290/10 at 610, not downtown. Forcing everybody to go downtown may actually suppress HSR ridership, especially for those going to/from the west side.

About Me

Social Systems Architect and entrepreneur with a genuine love of my hometown. I cover a wide range of topics in this blog - including transportation, transit, economic development, quality-of-life, city identity, and development and land-use regulations - and have published numerous Houston Chronicle op-eds on these topics. I'm a Founding Senior Fellow with the Center for Opportunity Urbanism and co-authored the original study with noted urbanist Joel Kotkin and others, creating a city philosophy around upward social mobility for all citizens as an alternative to the popular smart growth, new urbanism, and creative class movements. I am a native Houstonian, 6th-generation Texan, attended Rice University for my BSEE and MBA, and a former McKinsey consultant and adjunct faculty member with Leadership Houston. I am currently the founder of Coached Schooling, pioneering a transformational new approach for a more effective and engaging 21st-century K-12 education combining the best elements of eLearning, home and traditional schooling. CONTACT EMAIL: tgattis (at) pdq.net - send me an email if you would like to receive these posts via email, or see the Google Groups signup box below.